TMI Blog2019 (10) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... which included the fixed assets, but no break up of assets values and itemwise was provided in the Transfer Scheme, 2003, as such the assessee had appointed an auditor to make itemwise opening balance of the assets and liabilities, which according to the assessee themselves was submitted by the auditors to them on 4.12.2015. The contention of the counsel for the Department regarding the depreciation, which has been disallowed by the assessing officer on the balance assets acquired on the date of Transfer Scheme, 2003, as the assets was was not identifiable at the relevant point of time, needs consideration. The auditors themselves had submitted report to the respondent-assessee on 4.12.2015 and the assets so acquired under the Transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/Alld/2015 and 499/Alld/2015 for the assessment years 2010-11, 2011-12 and 2012-13. 2. Issue in all these appeals under challenge are same, hence are being decided by a common order, treating appeal no.251 of 2013, for the assessment year 2007-08, as the leading appeal. 3. All the appeals are filed on the same question of law, which read as under: Whether the Income Tax Appellate Tribunal is justified in law and facts in holding that the assessee was entitled to claim depreciation on the fixed assets acquired on transfer scheme 2003 which was not yet finalized/ascertained on the fact that the actual assets are not identifiable and not being used as well as their full title have not been t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as distribution licensees ) were created under the U.P. Transfer of Distribution Undertaking Scheme,2003 (in short called as Transfer Scheme, 2003 ), vide notification no.2740-PA-1-2003-24-14P- 2003, dated 12.8.2003, issued by the State Government to undertake distribution and supply of electricity in the areas under their respective Zones specified in the Scheme: (i) Dakshinanchal Vidyut Vitran Nigam Ltd. (Agra Discom or DVVNL) (ii) Madhanchal Vidyut Vitran Nigam Ltd. ( Lucknow Discom or MVVNL) (iii) Paschimanchal Vidyut Vitran Nigam Ltd. (Meerut Discom or PVVNL) (iv) Purvanchal Vidyut Vitran Nigam Ltd. ( Varanasi Discom or PVVNL) 8. The said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 13. Present dispute relates to the assessment years 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13. In all these years the assessing authority had disallowed the depreciation claimed by the assessee on the assets transferred to it pursuant to the Scheme of 2003. 14. Sri Gaurav Mahajan, learned counsel appearing for the Department submitted that Section 32 of the Income Tax Act provides for depreciation in respect of building, machinery, plant or furniture, being tangible assets. He relied upon sub-section 1(ii) of Section 32 of the Act, which provides that depreciation shall be granted only when the assessee owned, wholly or partly and used for the purpose of business or profession that the deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim of depreciation to the assessee for the relevant years in question as well as for the previous assessment years, as such the arguments of the Department has no legs to stand. However, he candidly admitted the fact, that the task for determination of itemwise opening balance of assets and liabilities had been completed and the reports had been submitted by auditor/agency to the assessee, the same have been brought by the counsel for the assessee before the Court in his written submission, which is dated 4.12.2015. The relevant extract of the letter dated 4.12.2015 are extracted here as under : 18. Sri Bansal lastly submitted that in case the court is of different view, then the matter be remanded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the respondent-assessee. 22. In view of the above, we are of the considered opinion that the matter needs to be examined afresh for the claim of depreciation by the assessing officer, in the light of the auditor s report providing itemwise accounting of assets and liabilities on 4.12.2015. Thus, the matter is remitted back to the assessing authority to reconsider and verify the records and pass fresh order, as far as claim of depreciation on the assets claimed by the respondent-assessee, pursuant to the Scheme of 2003. 23. We hope and trust that the aforesaid exercise will be carried out by the assessing officer within three months from the date of production of a certified copy of this order, with t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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